How to plan your finances

The quality of life is determined by your health. However, life sometimes throws at us difficult curveballs that may set us back physically, mentally, and financially. Critical illnesses are often sudden and unspeakably difficult for the sufferer and the family. While it debilitates them psychologically and physically, it also depletes their finances, often leaving the family in a financial crisis. Making matters worse for the middle class, the cost of treating critical illnesses has been rising meteorically over the past decade.

For a better perspective on the issue, consider this: India’s healthcare inflation has been reported to be increasing at double the rate of its overall retail inflation. The average retail healthcare inflation for India was 7.14 percent for 2018-19, rising significantly from 4.39 percent in the previous year. What’s more striking is that in January 2019, the domestic healthcare’s contribution to the overall retail inflation was higher than that of even education and housing. The rate of retail inflation related to hospital and nursing charges was the highest during 2018-19 at 9.4 percent, while it stood at 6.5 percent in the previous fiscal year. Another component in healthcare which has undergone a dramatic spike in inflation was medicine (non-institutional), which increased from 3.78 percent in 2017-18 to 7.2 percent in 2018-19.

Now, this makes thinking about critical illnesses in the future scarier, even for the optimists who believe nothing bad would befall them and their family. Though it will never be possible to predict what life holds for us ahead, we can stay prepared at best so we don’t have to throw caution to the wind when adversity strikes. Instead of throwing ourselves into the chaotic and unpredictable future, we should be planning it well in advance through research, cautious and practical calculations, covering future risks, and working with our available resources and budget. To safeguard their families and themselves against such risks, an increasing number of investors are now buying critical illness insurance cover that is aimed at providing its purchasers with a financial cushion during the times when the flow of income might come to a halt while the expenses keep piling up. Terminal or critical illness cover is a health insurance policy rider which can also be defined as an attachment or an amendment to an existing policy that provides coverage in addition to the plan.

Simply put, a critical illness insurance plan covers the financial risks after you come down with a serious medical condition, apart from your hospitalization expenses. In a critical illness insurance plan, the policy holder gets a single lump sum amount if he is diagnosed with a critical disease that’s included in the policy plan. It helps you cover the recurrent medical bills that are not covered by your usual health insurance plan, along with the daily cost of living while you are ill. A critical illness implies that you will have to take a long break from work, that is your fixed, monthly source of income. Most of us know of someone who had a serious medical condition that forced him/her to miss work for a long period of time or even lose the job. Critical illness insurance plan takes care of your financial needs during that rough patch of your life.

It also lets you focus on your recovery instead of worrying about hospital bills and finances. Many term insurance policies today, come with terminal illness riders, allowing you to have comprehensive life insurance in place. In fact, with the Heart and Health Insurance Plan provided by Future Generali, along with a death benefit, you receive a comprehensive cover against 59 critical illnesses and surgical procedures which include heart and cancer-related ailments.

It is important to note her that there are several factors that can influence your specific premiums in a critical illness insurance plan. These factors include: your medical history along with the current medical condition, age, gender, and amount of coverage you're seeking.

Critical illness insurance plan also gives you tax benefits under Section 80D of the Income Tax Act. Therefore, investing in a critical illness insurance plan is a smart financial move given our deteriorating lifestyle, increasing stress, and rising cost of medical services in the country. Nowadays, you can easily buy this rider online and prepare yourself for any critical health issue in the future and be confident that you would sail through it smoothly.